# All Questions

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### What is the economic interpretation of the solution of this optimal control problem?

I have the following optimal control problem $$\max_{c_t} \int^{\infty}_0 e^{-p_it}\ln(c_t(i))dt$$ subject to $$\dot{w_t}(i)=rw_t(i) -n_ic_t(i)$$ $$w_0(i)=w_0>0$$ I have some wealthy and ...
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### How monetary profit is possible if aggregate prices exceed public purchasing ability?

When firms produce products, they pay households for labor. Later households use the earned money to purchase those same products... but since households purchasing ability is equal to firms' ...
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### Who is the first one to equate “rational” with “complete and transitive”?

MWG taught that, suppose that the menu is finite, "rational" is the same as "complete and transitive". But it seems that it does not cite any sources. Who said this first? vNM said in 1944 that their ...
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### which is an example of demand curve that is always inelastic/elastic?

Which class of functions have the property of being always elastic?and instead always inelastic?
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### EMH: Difference between market price and fundamental value?

I am confused by the relation between stocks market prices and fundamental (or intrinsic) values stated by Efficient Market Hypothesis. How these deviates regarding to efficient market theory or are ...
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### Comparing cost of living of one state with that of other states [closed]

In the past I read something like this: If basic expenses for family went from 100€ to 200€ but its wage went from 200€ to 400€ it can expend more than before. Weighting the costs of living ...
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### Any drawback from printing money to pay for national services such as the NHS? [duplicate]

Why can't we just print money to build national infrastructure services such as an additional hospital for the NHS? This would create growth, allowing more doctors and nurses to come through but more ...
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### Correlation between nominal bond returns and growth

I read the following passage and the bolded section has me confused: In theory, assets earn a low (or negative) risk premium if they tend to perform well when the economy is weak. When growth ...
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### Consumption Set in Arrow-Debreu

I'm very inexperienced in mathematical economics, so when I came across the idea of the consumption set in Arrow-Debreu, I was a little confused. So for each element x in consumption set X, what does ...
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### Difference type of crowding out effect in economics

In macroeconomics I came across two type of crowding out. First, in IS LM model where in classical case, when LM curve is vertical increase in government expenditures have no increase in output i.e. ...
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### Does income equality correlate with less fraud?

If a population of people have less disparate income levels among themselves, are we able to predict anything about the level of phone scams, phishing emails, etc. perpetrated by members of that ...
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### Dataset including decentralization of infrastructure spending?

Does anyone know if there exists a dataset of many countries (preferably developing countries and preferably with a time series) including the amount of spending on infrastructure by local government ...
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### Kaldor-Hicks optimum allocation with externality

Suppose there are two individuals. Level of good h can be determined only by individual 1 and it has a positive externality on individual 2. To find Pareto efficient allocation, we add the utilities ...
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### How to measure and demonstrate risks of technological uneployment or dualisation?

Our country is consudering its own strategy for artificial intelligence. Currently it is being considered at the level of ministerial secretaries and the next move is the plenary committe of ministers ...
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### Is local non-satiation enough to talk about Walrasian Equilibrium being subset of Core

In Advanced Microeconomic Theory, the author mentions that the Cobb Douglas utility function is neither strongly increasing nor strictly quasiconcave over all of R+. But the condition of strongly ...
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### Regression design, difference in differences

I plan to look at the regional differences of a policy effect. I would like to use the difference in differences approach however I am not sure how to assign a control group. I have data for time ...
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### How to interpret the intersected information partition element of different actors?

In this paper, it said that given $\omega$ is the current state of the world and $P_1(\omega)$ is the unique element from the information partition $\textit{P_1}$ of actor 1 in which the player 1 is ...
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### A problem: allocation of apartments

Setup: Trine owns an apartment in Copenhagen. She is willing to rent it out at any positive price. Peter and Simon lives together and are both students. They will like to rent the apartment for less ...
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### Order of Marginal Effects in Ordered Regression Model

I'm looking to validate my understanding of marginal effects on the probability of an ordered probit model. I don't understand how ME is calculated in respect to some alternatives. For example if I ...
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### Calculting the Exchange market pressure index

Does anyone knows how to calculate the exchange market pressure? I am using the following paper to calculate the EMP, but I am not sure if I am calculating the relative precesion correctly. My Stata ...
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### How do you calculate the cost of down time in production?

We are looking at a process that will significantly reduce down time in production for (at least) one of our products. In addition to the saved labor and material costs, is there a way to calculate ...
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### How to integrate technology lifetime in NPV

I want to calculate and compare the NPV for different ways of producing a good X. The NPV should be calculated for 30 years. The following technologies can be used for production: Technology A, which ...
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### Production for multiplant firm?

A multi-plant firm will never produce at a plant with an increasing marginal cost when they own another plant with a decreasing marginal cost. Is this true? My reasoning behind this is that firms ...
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### How does a government implement negative interest rates in practical terms?

We usually understand interest rates from a very simple story "you went to a bank ans asked to borrow money, the bank agrees but requires you to return an extra amount be the end of the loan term, ...
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### Is the supply of a price-taking firm increasing in price?

Is the supply of a price-taking firm increasing in price? When the price goes up, this means that firms can make more profit. Therefore, they would want to increase their supply. Is there a way to ...
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### Examples of textbook definitions of transaction costs, for a non-econ student

I'm not an econ major, neither am I taking it as a minor, however seemingly out of nowhere economics has jumped into my CS class when talking about the role of IT in reducing transaction costs of ...
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### Why do commercial banks buy government bonds at negative interest rates instead of keeping cash?

I know commercial banks need to meet liquidity requirements, but why would they choose to invest their money in an instrument that is guaranteed to give them a negative return, instead of just keeping ...
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### The assumptions of Rational Expectations Models

What are the assumptions between rational expectations models and how restricted are there for the following results of economic theory? Where can I find them all gathered in some textbook or in the ...
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### echange rate from LOC/EUR to EUR

I have import values in LOCEUR (LOC is local currency). How can I obtain these values only in EUR? My data are from Eurostat, where external trade indicator is "Exports in million of ECU/EURO"
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### Study guide (and…) for “Intermediate Microeconomics with Calculus” by Varian

I have been googling study guides, solution manuals and other helpful material made by professors. But I have not found anything useful. Q: Do you guys know anything that will make the book easier ...
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### Spending despite fiscal deficit

This is going to be a rather simple question. Surprisingly, I did not find quite a lot of answers satisfactorily explaining my point. The question goes like this- The USA, under the Trump regime, ...
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### demand for money

I am currently studying the demand for money by Blanchard. this model assumes that the amount of money held is basically related to transaction levels and the the attractiveness of bonds. i.e.: ...
From here and a pile of maths that I've done myself, $x_1 = \frac{a}{a+b}\frac{m}{p_1} \\ x_2= \frac{b}{a+b}\frac{m}{p_2}$ This yields inverse demand equations, when you have numbers stand in for \$...